Twitter: The Machine to Rage Against

Suppose you are a pedestrian about to cross the street. A car approaches the crosswalk and the driver sees you. You think he will let you go first. Instead, he stops for a fraction of a second and does not give you a chance. You flip him the bird, that guy must be an inconsiderate jerk. Well, a few days ago I was that guy. This happened around the corner from my house, and I barely made it to the bathroom. I am so sorry random pedestrian, I normally would have let you go first but… when you have to go, you have to go.

This little anecdote is an example of one of my favorite cognitive biases, the Fundamental Attribution Error. This is a fancy name for the tendency to explain someone’s actions based on who we think they are, instead of what the situation may be. If we do not know either, it is easy to imagine that the person is a certain type of individual. It is harder to think “why would I have done what this person did?”

Now, let’s imagine that we are trying to create a platform for people to communicate online. However, this is not our own startup. We are on a contract with Satan himself. He instructed us to maximize confusion, outrage, misunderstandings, hatred. How do we approach this problem? I have some ideas. First, I would remove voice and image. Everyone who has ever participated in an internet forum knows that is it much easier to hate on a faceless, voiceless stranger. However, that will not be enough.

This is the fourth paragraph of this post, and I have not yet fully expressed my point. If you forced me to sum it up in 280 characters I might be able to convey the gist of it at the expense of nuance and context. If I happened to be sitting at a table with acquaintances and did this, we may engage in a conversation. If my pithy sentences were not clear enough, I would be forced to restate and elaborate. The space restriction that made Twitter popular also has nasty side effects: it forces the author to omit everything that “goes without saying.” I bet that if I went to my timeline right now, I would find an example of this pattern:

  • Person A tweets something, generally an opinion.
  • Person B interprets A’s tweet in the worst possible way, distorting the content of the tweet while assuming that this interpretation of the content is the correct one. As only an idiot could have this opinion, A is an idiot.
  • Fight ensues.

Is Satan happy yet? No, we still have room for worsening. If I am at a random party and walk around, I will hear random conversations. Perhaps I will miss the most inane or egregious ones, the ones that might make it hard for me to not react angrily. However, this is Satan’s party in Hell. Satan’s algorithmic minions will make sure that I do not miss out on these conversations. If it were a normal party Satan would care about making his guests happy, but that is not His wish. He wants us to stick around for as long as possible. How could we leave the party when someone is wrong?

Finally, let’s imagine that Satan’s party venue is in Las Vegas. The popular saying is that what happens in Vegas stays in Vegas, but once again this need not be true. What happens on Twitter appears everywhere on the internet, and I cannot escape. Many rage-inducing tweets are quoted everywhere: Slack, Whatsapp, Discord, your social tool of choice. The author of the tweet may never know about the viral memetic agent who brought us the tweet. Twitter however knows that I cannot escape its malevolent, omnipresent internet reach.

Do you believe Twitter is not a mind virus? I invite you to convince me otherwise. Just not on Twitter.

Is Bitcoin Really Throwing Energy Away?

Today I saw yet another article about how Bitcoin is bad for the world. The authors focus on Bitcoin’s energy consumption, and find it completely pointless. Bitcoin (and by association all cryptocurrency) is the root of all evil, the Destroyer of the Environment, ManBearPig. Well, wait a minute Mr. Economist. Let’s first focus on what Bitcoin is doing with all that energy and why. Why does a financial system need energy at all?

Imagine that you tweeted “Check out these cardboard boxes containing twenty million dollars in cash [picture of your basement room].” That does not sound like a good idea. Someone might be tempted to find out where you live and break into your house. If you have that kind of cash, you will spend energy to protect it. This is because you know that others are ready to spend energy taking it from you. This happens everywhere, all the time. Stores are robbed, people get mugged, financial fraud happens. Banks have huge security budgets, move bundles of bills in armored trucks, employ armed guards.

When it comes to money we generally have to make a tradeoff between security and convenience. We all use cash or credit cards for small amounts that we could afford to lose. We do not keep large sums around. We find ways to park our money that involve losing liquidity in order to gain safety. The most common one is real estate. I recently read Factfulness by Hans Rosling. At some point he talks about how if a typical American were to visit Tunisia, she might see half-built houses and think that the locals must be lazy. Instead, they save money in bricks. Because they do not have easy access to banks, they buy bricks and add them to the construction as they go so that they will not get stolen!

I suspect the main reason Bitcoin’s electricity bill gets so much attention is that it is so easy to calculate. I would like to be able to compare Bitcoin’s security cost against the traditional mechanisms: vaults, armored trucks, security guards, police, lawyers, etc. Unfortunately this is not trivial to do. I have not yet seen a fair comparison of relative efficiencies. It is very possible that right now Bitcoin is ten, twenty or a hundred times less energy-efficient than the traditional financial system. We simply do not know.

The question that matters to me is, could cryptocurrency (not necessarily Bitcoin) make securing and transferring money more efficient in the long run? There is obviously a minimum threshold of energy that must be spent to defend from the “bad guys.” How low can we go? If we use the history of computers as a guide, I would imagine there is more room for improvement than most people think. Saying that cryptocurrencies have no future because they use too much energy would be like saying (in 1950) that “computers will never be popular because they take up too much real estate.”

Construction begins on ENIAC, May 31, 1943 - EDN

I suspect in the long run Bitcoin will be remembered like ENIAC, a pioneer of cryptocurrencies. I do not imagine that Bitcoin can easily move away from its current securing mechanism (Proof of Work). Instead, newer cryptoassets will take advantage of greener mechanisms. Perhaps proof of stake, perhaps something else (proof of space, time, who knows). It is a solvable problem, and the only reason it has not been solved yet is the extremely fast explosion in popularity that crypto is experiencing. If you believe in the concept of digital and decentralized money with arbitrary features that go beyond what cash can provide, it’s time to place your bets and wait.

Generic VC Advice Letter for COVID Times

These are unprecedented times. By unprecedented I do not mean that the current situation has not occurred before. Of course there have been pandemics, perhaps even as recently as one thousand years ago. However, as a Venture Capitalist I do not believe in looking back. I believe that we must build for the future. We could build for the past too, but I am convinced that it would be the wrong bet. I for one am investing in the Future.

I foresee hard times ahead. Only the companies that manage to not die will survive. The rest will not make it. The question we need to ask ourselves is, how can we predict who will be the winners and the losers? The short answer is that we cannot, but that would be a disappointing thought. Let me give the long answer then. It is always possible to predict the future if you do not aspire to be accurate, and that is my job.

Coronavirus is a game changer. This is a time of war, and only wartime CEOs should be at the helm of our portfolio companies. This is why we have organized a founder retreat / boot camp in which our negatively tested portfolio leaders will learn the basics of hand-to-hand combat and guerrilla warfare. We do not expect that all of them will make it back, but that is a sacrifice our fund is willing to make. As Steve Jobs was fond of saying, “death is very likely the single best invention of life.”

Our founders who come back will be stronger and ready to build. Build what, you may ask? Things, of course. This may seem like a completely obvious answer with the benefit of 2030 hindsight, but today we are willing to bet the farm of our LPs on this thesis. And let me be more specific, without fear of alerting our competitors. Some of the things our portfolio investments will build are necessary because our governments worldwide are incapable of providing the services fundamental to operating the mechanisms that would make it possible for citizens to perform the duties required to avert future unknowns. You can read that again.

Roads? No, where we are going we don’t need roads. We are going places that are inside perhaps. We are going to the mind. We need self-cutting hair. We need infrastructure that will help us restart the American Dream after restoring a backup from an update prior to the buggy release that should not have been approved by the QA director we have just fired.

Let me stress an important point: we need to build for everyone. And by everyone, I mean specifically those who will pay for the products and services our companies will provide. We also will build mechanisms to facilitate citizen access to loans to purchase said products and services, because in times of need we must also help each other without expecting anything in return.

There are innumerable ways to honor the legacy of our forefathers, foremothers, and foreuncles. We believe in exactly one of those ways, which is to build. Things, specifically. So from Meccano to Legoland, here we come with a brick in our hand.

Short Story: Smoke on the Water

Writing prompt: It has been discovered that some people don’t get sick with the virus. Instead, it enhances them somehow. Is it a superpower? Will it last? No idea, anything goes. You are one of these people (e.g. Laura Derpson, lawyer, 37) and you describe what happened / is happening to you. 500 words or less.

James Hirschbaum, 54, accountant from Jefferson Park, PA

When my fitness band melted, I thought it was a bit weird. Then I went to the kitchen and poured myself a glass of water. As I walked back to the couch, I thought I saw steam rising from the surface. I did not really pay much attention; I drank it and it seemed cold to me. The rest of the day was a blur, I assume it was ordinary. When I woke up the next morning I felt great, but everything around me was on fire. “This is fine,” I thought as I jumped through the window. Actually, jump is not the right word. I flew.

As I saw my flaming house from above, somehow this seemed natural. Soaring around the neibghborhood with a smokey trail behind me was as exciting as filing form 475B – State of Pennsylvania Exemption for Nonoperational Urinal. My mind was occupied with the more important fact: the virus set me on fire, and fire killed it!

It did not take me long to find a few other Fire People. I did some math and estimated that there must be hundreds of thousands of us in the world. Our tribe crossed thirty today. We are starting to figure out an organizational structure. We are too small for taxation, but for now my role is clear: I am the record keeper. If it turns out that the virus adapts to fire and gets us in the end, our story will not be lost. I burn letters into wood with my pinky every night, as the others cook our food by hand (literally).

Last month we went out and performed a service for the Old Society, just because it seemed right. There was a pile of thousands of Normal bodies left outside of Pittsburgh, and we cremated them. It felt very sobering and proper, as if we were paying our share. I estimate that we need to do this at least once every three months, and I have established a cremation goal for every member of the tribe based on their respective contributions to the group. Old accountant habits die hard.

It turns out we, the Fire People, are not a special case. Yesterday we finally saw the first patrol of Water Elementals, so we know that we do not have a lot of time until the first battle. The element of surprise is key: they can extinguish us, or we can vaporize them. Who will prevail, I have no idea. However, no matter the outcome, it still will be better than the fate of the Normals. As I write this, we unite in our battle chant. “LIKE DEATH AND TAXES WE SHALL NEVER EXPIRE, WE ARE THE PEOPLE OF THE FIRE!”

Why Learn to Code for Fun and Not Profit

Twenty years into the millennium, programming jobs still pay well. Software is everywhere, and organizations need “construction workers” of code. A significant portion of the work in this field does not require a college education. New learning institutions (such as coding bootcamps) have emerged to fulfill demand. It was not always like this, of course. Back in the 80s when I wrote my first lines of BASIC, I did not learn to program in the belief that it would lead to a career. I did it because it was a fun and challenging hobby. Decades later, I believe that learning how software works is important even if you never intend to make a dime as a programmer. Why?

TI99/4A BASIC from the 1980s, my first programming language

Over the history of humanity, we have learned to build all kinds of machines. Some of them are very simple. At first glance, one may not grasp the ingenuity it took to create them. Think of an hourglass, or a door knob. A kitchen stove, perhaps. If you see one of these for the first time, it may not be obvious how it works. If you are curious, you might want to take it apart and figure it out. Other machines are more complex. A car engine, a vacuum cleaner, a transistor radio. These mechanisms were invented much more recently, as the result of cumulative knowledge gained during the Industrial Revolution. If you wish to understand how one of them operates, you may need to study some basic science such as chemistry, mechanics, electromagnetism. However, all these machines are physical systems. There is a limit to their complexity because of space constraints and materials.

With computers, many of these limitations go away. When you write a program, you are building a machine simply by describing it. Think about the implications of this: you are using a physical machine (the computer) as the material support for a logical machine (the program). This second machine is extremely malleable. Unlike the fixed hardware of the computer, you can describe a practically infinite number of machines. A spreadsheet, a first-person-shooter game, an app to put cat noses and bunny ears on your selfies. The primary limitation is our collective ability to imagine these applications.

As you learn to code, you will experience several “aha!” moments as you gain new insights. Some examples:

  • A computer is a very dumb mechanism. However, it is incredibly fast. If you make it do something stupid repeatedly, it will do it millions of times before you stop it.
  • Once you have built one of these machines, you can copy it indefinitely. You will never need to build one like it from scratch again. Imagine if you could build a chair or an airplane just once and then clone it every time you needed one, for free.
  • You can use a piece of software as a building block for new pieces of software. In other words, you can build machines using machines built from machines, ad infinitum. How many of them are collaborating to create your reading experience right now? How many people were involved in making them?

It is easy for me to write about these insights, but I cannot fully convey their significance with words alone. I might as well be talking about the ecstasy of seeing the Earth rise over the lunar horizon for the first time. I do hope these words inspire you to dip your toes in the vast ocean of zeros and ones. Just like there is no need to become a historian in order to enjoy history, we also do not need to aspire to professional software wizardry to appreciate the beauty of these machines created purely by thought.

What Americans Get Wrong About Freedom

Freedom is one of the most abused and diluted words in the English language. It is not possible to discuss it without first clarifying what exactly we mean by it. Let me offer my definition of freedom as the intersection of three sets:

  1. What an individual may want to do.
  2. What an individual could conceivably and realistically do.
  3. What the rules of society allow that individual to do.

It is immediately obvious that the resulting set is different for each person. People want different things, and people have different possibilities. If we had laws making it illegal to drink gasoline or to export bananas to another galaxy, I would not believe they would restrict my freedom. I have no interest in the first, I cannot do the second (however awesome it might be). Coming back to Earth though, there are regulations that restrict the freedoms of the privileged (e.g. taxes for the ultra rich, anti corruption laws for government officials) or the poor (sleeping in a car, urinating in public).

What is also pretty clear is that money expands set #2. In authoritarian countries that have experienced significant economic growth, people believe that they experience significant more freedom than they used to. This is usually hard for Americans to come to term with, because they tend to think more about set #3 when it comes to freedom.

Set #1 is interesting because it is so subjective. What a person may want to do depends on their personality, their imagination, and their culture among other factors. When set #1 expands, it will collide against the other two sets. For example, it had never occurred to me that I would be able to control a drone until recent years. Now that I can, I am aware of the many legal restrictions that exist for what you can do with them.

The main takeaways:

  • There are many ways to increase a person’s freedom that have nothing to do with laws. For example, poverty restricts freedom.
  • When people say they “fight for” or “defend” freedom, it is important to understand what is their position regarding the three sets above. Most likely they are concerned with laws that could collide with their sets 1 and 2.
  • You cannot impose your views of freedom on others. Before even discussing it, you have to understand their desires and possibilities.

The Algorithm Excuse – an Exploit in the Wild

A few days ago I saw DHH’s tweet storm about how he and his wife have different credit limits on their Apple credit cards. When they tried to find out the reason, the answer they gave them was “sorry, it’s the algorithm.” The problem with this response is that it reveals no information regarding the real reasons, and this highlights a relatively recent legal loophole.

If you actively enact a discriminatory policy, that is illegal. Someone can point at your policy and sue you for discrimination. However, there is nothing stopping us from encoding discrimination into an algorithm. This is in fact fairly easy to do, as Cathy O’Neil explains in this Ted Talk.

If an organization does this and they get caught, all they need to do is act surprised and promise to look into it. Nobody is going to scrutinize their data or code. Unlike a public policy disclosure, data and algorithms are opaque and often secret. This needs to change. We do not need to know the data or the code, but we can feed a variety of cases to an algorithm (for example, a million artificial person profiles) and see what it does.

Until the laws force organizations to prove that their algorithms are fair, we will live in this legal loophole. If you run into this situation yourself, remember this post. Make the situation public, ask for transparency. Ping me on Twitter if you need help!

Nobody Knows Anything About Startup Ideas

In the world of entrepreneurship, ideas occupy a mystical place. Is it possible to have a unique idea? What makes a good idea? There is a common trope about how ideas don’t matter, it’s all about execution. Some people believe that great ideas look like bad ideas at first.

If we try to formalize this, a startup idea is simply a hypothesis about the following:

  1. I can build a certain thing.
  2. By the time this thing reaches the market, people will want it.
  3. The world will evolve in a direction that will favor this thing.

The first one is the easiest to prove. You either can built something or you can’t. The second one is a little harder because it’s contingent on the first having happened. Now, the third one is the really difficult one, because of Chaos Theory. Let me illustrate with an example.

It’s the year 1500, and two scientists are arguing about when humans will explore space. They make a bet. One of them believes it occur before the year 2000, the other believes it will be after. Fast forward to the 17th century, a young man named Isaac Newton is sitting under a tree, contemplating the clouds on the horizon. Suddenly an apple falls on his head, and he has a great idea regarding gravity. Excited, he gets up and starts walking home to write it down. Unfortunately he gets hit by a lightning bolt and dies. This sets physics back by several decades. In the year 2019, a human being rides a rocket outside the Earth atmosphere for the first time. “Space is no longer the final frontier,” someone tweets.

Was Webvan a great idea? Was it a better idea than AirBnb? Was WeWork a great idea? Were these ideas better than something I cannot name because it was quickly killed by metaphorical lightning?

We humans are proud creatures, and we want to believe we are good at predicting trends. The truth is that we are not. The best we can do is bet on a scenario that seems plausible to us, and then hope it unfolds. Survivor bias makes it look like prophets exist, but it is reasonable to ask ourselves: for every winner who gets to tell me their story how many of them are back at the drawing board, hoping to catch the right wave the next time?

The News Is a Liability – How to Be Informed in 2019

How easy it is to make people believe a lie, and [how] hard it is to undo that work again!” –Mark Twain

Only thirty years ago, it was normal to go for hours or days without being exposed to breaking news. One time in the early 90s I went on a week-long hike in the Andes. I remember that when I came back I was curious about what might have happened in the world while I was gone. I did not know it at the, but I would never experience this feeling again.

Now, every time I check my phone I find a story that a person I trust believes is newsworthy. Most often this comes accompanied with an emotional reaction, and an implicit assertion that the story is true. Here’s an example, a tweet mentioning Taylor Swift’s dispute with a music label:

By her account, Taylor Swift has been wronged by unscrupulous businessmen. She is urging her fan base to help her fight injustice. It is a very good story, and well told. I want to believe it.

I immediately resort to my usual modus operandi: if I care enough about something (it could be a military coup in Latin America instead of the tribulations of Tay, it does not matter), I do my own research. A few minutes and keystrokes later, I have a different opinion. The situation is a mess, and you could argue either side of the dispute. If I were selected as a civil juror for a potential court case, I would be able to reserve my judgement until seeing all the evidence. I have little doubt that both lawyers would be able to make a compelling case for their clients.

The ease with which anyone on the internet can manipulate my feelings has made me cynical. I do not want to help information spread unless I have made an effort to:

  1. verify that it has a reasonable chance to be true.
  2. convince myself that this information is useful signal in an extremely noisy world (I know this is subjective, but still better than not considering the issue at all).

I believe the world would be less noisy if everyone tried to apply similar principles. Wouldn’t you agree?

Technologies of Distraction

What do these three technologies have in common?

  • Amazon’s drone delivery prototypes.
  • Boston Dynamics humanoid robots.
  • Facial recognition for tracking people.

Answer: they are all flashy, impressive, easy to understand. Also, they are possibly not the most effective way of accomplishing a certain function.

  • Drone delivery is really expensive, risky and inefficient. It’s potentially useful in cases of extreme urgency where there are no roads. It really does not make sense for mass delivery of consumer goods. For this, a hybrid delivery network using all sorts of transportation technologies suited to individual scenarios is the answer.
  • Seeing a robot perform athletic feats is the equivalent of a computer beating us at chess. However, a robot can have any shape and any size. It can be a gun with wings, it can be a chainsaw on wheels, it can be both. A robot that can jump, dance and fight like a human is really just flexing.
  • Facial recognition is one of countless technologies to track humans. Off the top of my head you can track someone’s gait, body type/shape, style of clothes, voice, devices they carry, fingerprints, body temperature, modes of transportation, heartbeat, breathing rate, etc. We don’t hear many people complain about the prevalence of those other forms because humans just can’t relate to them as well.

The point: for every one of these marketing-friendly technologies that catch the public eye (and maybe infuriate activists) there are countless others that are more powerful, unnoticed and inevitable.